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Florida Arrests High-Dollar Bitcoin Exchangers For Money Laundering
tsu doh nimh writes "State authorities in Florida on Thursday announced criminal charges targeting three men who allegedly ran illegal businesses moving large amounts of cash in and out of the Bitcoin virtual currency. Experts say this is likely the first case in which Bitcoin vendors have been prosecuted under state anti-money laundering laws, and that prosecutions like these could shut down one of the last remaining avenues for purchasing Bitcoins anonymously."
"Coin Wash Laundry" ...and how many times has one been a front for a counterfeit puppy sex change massage parlor bag drop underground railroad safe house, after all.
I would make a case for entrapment. If anyone comes to you and says something along the lines of, "I've got some drug money to launder, I need $30,000 in bitcoins..." don't say yes. I mean, Jesus Christ, how fantastically stupid do you have to be to go for that?! Still, law enforcement is breaking the law when they create crimes to arrest people for. Beyond that, unless they're going to make private money transactions illegal, this case doesn't really mean anything for the bigger picture.
This signature has Super Cow Powers
Yeah I agree. It should mpt be a crim for people to do what they wish with their money. So unless they willingly take in money they knew was from drugs or something ilegal then there should NOT be a case.
If someone comes up to your business and says "hey i'm going to use this for illegal purposes", and then you agree to accept the money, you're in violation of several laws. RICO is one, and so is money laundering in some cases. His biggest mistake was at the point when they said what they were going to use the money for, in this case to buy stolen credit cards online, he accepted the deal and continued working with them. He should have said that he doesn't do anything illegal and not dealt with the potential customer at that point. That would have shielded him from liability.
The entire 'barter system' scares governments as they cant track and tax it. Things like bitcoin will be crushed, one way or another.
They also are not keen on regular currency, for similar reasons.
---- Booth was a patriot ----
As to the topic itself, of-course the gov't sees Bitcoins and thinks 'money laundering'. Don't you know? All money belongs to the government,
All money is regulated by the democratically elected government, yes.
they can't stand the thought of people figuring out this whole freedom thing,
No, people with a dictator complex like the thought of creating something unaccountable to government, i.e. unaccountable to the people.
what if the people realise they don't actually have to pay taxes en mass and simply don't pay.
"What if Somalia?"
What happens when everybody simply stops paying?
What if everyone just starts raping and shooting everyone? What if the real world was like one dimensional fiction? Nerds, tell us.
It depends on how law enforcement first came into contact with those that were arrested. The article is somewhat ambiguous about how these guys came to the attention of law enforcement. It does appear that the only real crime these guys committed was being "unlawful money transmitters", which seems like a crime that should not exist to me. When the undercover agent told them that they wanted the bitcoins in order to do something illegal, they should have told them, "Sorry, I will not do business with you." Not because I think that they should legally have to care, but because people who genuinely want bitcoins to do something illegal are not likely to tell you that. This suggests that the person who is telling you his reasons is something other than someone who wants to conduct a transaction. It also seems likely that the reason they presented that they wanted to use the bitcoins for something illegal was because they doubted a jury would have convicted the men on the "unlawful money transmitters" charge.
Ultimately, I do not know if this was entrapment by the legal definition, but it does seem like a waste of law enforcement resources.
The truth is that all men having power ought to be mistrusted. James Madison
This is a sincere question... not a challenge to the usefulness or benefits of bitcoin, but just a question that, if bitcoin is to really have any kind of future, I think that people who *are* law abiding and might want to use it someday really need to understand.
File under 'M' for 'Manic ranting'
I would make a case for entrapment.
If you step into trap willingly, it ain't entrapment.
Still, law enforcement is breaking the law when they create crimes to arrest people for.
This is beyond stupid.
Money laundering has been practiced for over 6000 years, but the term itself comes from the prohibition era of American history.
money laundering
I see a lot of the comments so far are about how stupid it was to go through with the transaction after it was mentioned that the buyer was going purchase illicit material with it.
However, as I understand it from Krebs' post - and the Florida law in question - that doesn't necessarily factor into it. The law seems to state that as soon as you act as a money transmitter, and the exchange is between $300 and $20k within a 12 month period, without being licensed to do so makes you liable for a third degree felony.
Some questions I would have for a lawyer that actually knows the ins&outs of Florida state law in this field:
1. Is the above, in fact, the case? I.e. are the charges on those accounts completely unrelated to the disclosure of what the purchased material (in this case, Bitcoin) would be used for?
2a. Does that mean that the state of Florida sees Bitcoin as a currency?
2b. If it does not, then how would this same law be applied to e.g. physical goods if used as a material for exchange (e.g. gold nuggets, diamonds, etc.)
3. Would similar apply to a travelers going in opposite directions exchanging their currencies when the value exceeds $300 (something easily possible if you forget to empty out your wallet), rather than going through the official exchange bureaus at the airport (and incurring the rather hefty exchange fees)?
If anyone comes to you and says something along the lines of, "I've got some drug money to launder, I need $30,000 in bitcoins..." don't say yes. I mean, Jesus Christ, how fantastically stupid do you have to be to go for that?!
On the other hand, one has to be fantastically naive to expect a similar magnitude of business from people who only want to buy a cup of coffee at Starbucks. BTC attracts criminal proceeds like honey attracts flies. In essence, there is hardly any legal use of BTC (outside of pure speculation and experiments.)
One would be better off buying that TV or that subscription with an inflating currency than with a deflating one. Credit cards also give you insurance, and protection, and a small kickback, and a grace month during which you own the item but haven't paid for it yet.
The new Slashdot design is based on Windows 8. That fact alone, even aside from the numerous usability issues, indicates that the new owners have no fucking idea in the world what they've acquired.
Slashdot is a technology site, a geek site, an open source site, a programming site, an Internet / Web advocacy site. But more than that, it is a Linux community site. It lives and dies by its community. That community, by and large, is made up of passionate Linux advocates who can be whipped into a frenzy at the mention of Microsoft, who think Bill Gates is the Great Satan, who sincerely believe in free and open source software, and who implement that passion in their lives, hobbies, and jobs. Sure, not everyone here fits the mold. But that's the core of the community.
As one single data point, I work on simulators in the aerospace segment. We develop and integrate specialized, whole-system, software-only simulators, supporting software development when the hardware has limited availability or hasn't been built yet. Our user community is not large, but includes key technical people at well known organizations. Like others we interface with, our work has gone from Windows and Linux in the beginning, to mostly Linux, plus Windows if we have to. That's how we like it. Linux works for us - it's developer friendly, it's rock solid, it's quite deployable, and it lets us do what we need to do. And a bunch of us come to Slashdot to catch the news on Linux and other geek-worthy subjects, and discuss it with others.
And now the owners, having acquired this rather unique and valuable site, want to make it into Windows fucking 8 - the friendly, cuddly, but unusable Fisher-Price operating system that represents everything we despise? The mind reels. You might as well just make it a SEO parking page for Microsoft.
Seriously, DICE, do not do this thing. I know you don't care about the history, community, or shared values of this site, but this move will destroy them, and take the site with it. It will become a ghost town, abandoned by its residents, only visited by tourists and people that got lost on their way somewhere else.
How do you implement Slashdot's moderation system on Usenet?
Otherwise, creating alt.slashdot should be easy.
But maybe we should borrow ideas from Slashdot's current darling, Bitcoin: Make a distributed cryptographic Karma system!
Anyway, this discussion is better done over there. That submission has too few comments anyway.
The Tao of math: The numbers you can count are not the real numbers.
I would make a case for entrapment.
If you step into a trap willingly, it ain't entrapment.
Still, law enforcement is breaking the law when they create crimes to arrest people for.
This is beyond stupid.
The elements of the crime of money laundering are set forth in the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and Convention against Transnational Organized Crime. [2000] It is defined as knowingly engaging in a financial transaction with the proceeds of a crime for the purpose of concealing or disguising the illicit origin of the property from governments.
Criminalizing money laundering
Money laundering has been practiced for over 6000 years, but the term itself comes from the prohibition era of American history.
money laundering
unless they're going to make private money transactions illegal, this case doesn't really mean anything for the bigger picture
[Cash for legal purposes is defined as any] transaction in which the recipient knows the payer is trying to avoid the reporting of the transaction on Form 8300.
FAQs Regarding Reporting Cash Payments of Over $10,000 (Form 8300)
There is a distinct lack of video, and for a website to really pop these days it should begin playing any streaming content the instant you load a page
I can't think of a better example of what I DON'T want slashdot to ever do.
"really pop" - WTF, are you fucking serious?
My ism, it's full of beliefs.
Oops, the link went away. The "over there" should have linked to http://slashdot.org/firehose.p...
The Tao of math: The numbers you can count are not the real numbers.
Still, law enforcement is breaking the law when they create crimes to arrest people for.
It happens all the time, the best example being the "To Catch a Predator" type stings. Law Enforcement create a situation, a honeypot if you will, and waits for the flies. Fake pawn shops for fencing stolen goods is another example. Cops have also been known to encourage murder-for-hire in domestic situations like messy divorces.
But like this Bitcoin thing, "entrapment" is not legally defined the way most people suppose it is... In criminal law, entrapment is when a law enforcement agent induces a person to commit an offense that the person would have otherwise been unlikely to commit. They seem to get around it by supposedly providing opportunities to walk away. But like a fat person in front of a table piled high with Little Debbie's, it usually works out for the cops...
If you want news from today, you have to come back tomorrow.
Tell me the last time you heard a cash story that wasn't about money laundering or counterfeit cash
The last "cash" story I heard was about a homeless guy who turned in a bag or wallet or something full of cash to the police. The rightful owner was very grateful.
This was in the last few weeks. And yes, I am in the USA.
Captcha: charity
It is the people who ruin every single discussion and make it about the beta. Sites change and evolve get over it.
Idiots wasting mod points on negative BETA comments, or could it be DICE marketing droids doing it? oh and fuck BETA.
Wait, wha?.. How does that even work? Got pointers on further reading about that? Should be an interesting read.
I should have been more specific: The under-cover cop encourages the perp to hire the under-cover cop to kill the spouse. Quite common with these sorts of crimes.
If you want news from today, you have to come back tomorrow.
True, and of course you can do this for small and big amounts.
However, for the latter, it seems as though you in fact run afoul of some laws, depending on state, etc. See also a comment of mine further down.
Businesses accepting non-local currency is a bit different, as they tend to sell goods - rather than another currency. However, that prompts further questions again which...is also in that other comment :D
From the article;
and Florida’s anti-money laundering statutes, which prohibit the trade or business in currency of more than $10,000.
This is factually incorrect, The satute does not prohibit the transaction, it just requires reporting. This makes me believe that the dealer was charged under 869.102 which mentions "trade or business". Had it been 869.101 them the source of the money would have come into relevance.
The money laundering statute, Title XLVI Chapter 869 section 102, is about reporting.
All persons engaged in a trade or business, except for those financial institutions that report to the Office of Financial Regulation pursuant to s. 655.50, who receive more than $10,000 in currency, including foreign currency, in one transaction, or who receive this amount through two or more related transactions, must complete and file with the Department of Revenue the information required pursuant to 26 U.S.C. s. 6050I., concerning returns relating to currency received in trade or business.
If the bitcoin seller did not collect enough information to fill out the form and report the transaction so he was arrested. The law does not care if the money came from legal or illegal sources. If you don't report the transaction you have broken the law.
It means that the federal government is serious about treating bitcoins as a real currency. Which means that if you're an exchange you better file suspicious activity reports and comply with all the legislation and if you're an individual you better pay taxes on whatever you own. It's going to be incredibly difficult to convert bitcoins from anything like silk road into US dollars because you're going to get reported to the government at some point along the way.
It also means that pretty soon that anyone doing legitimate business in Bitcoin is going to be identifiable in the transaction history, which is going to be kind of interesting and make the feds wet themselves with glee. Bitcoin is not anonymous, it was only anonymous because the exchanges weren't following the law.
No, people with a dictator complex like the thought of creating something unaccountable to government, i.e. unaccountable to the people.
Not everything need be accountable to government or the people they represent. Very little would be legal and no one would be free under such a system. It's the height of hypocrisy to suggest the free actions of consenting adults is somehow indicative of a dictator complex. Projecting much?
While I don't have a problem with the government managing and regulating a currency on behalf of the people they represent, in a free society, government should not have a monopoly on currency, outlawing all other forms. Not to mention, the US government, among others, have abused their power to manage the people's currency by debasing it through inflation -- both as a backdoor method to increase taxes on the people and as a way to reduce the debt they've incurred through their constant spending of the people's money. Those, such as yourself, who defend the government's monopoly of currency, naively and ignorantly endorse this activity.
Such abuse by the government illustrates why the people should be free to create their own forms of currency and methods of exchanging goods and services, if they so choose -- not that abuse by government is a required justification in a free society. Provided all exchanges are voluntary and nothing is misrepresented, why should government or anyone else care how free people exchange goods and services amongst themselves? The answer, of course, is that they shouldn't. That is unless you are a tyrant or dictator.
Which is it, dollars or bitcoin???
Seems the concept is so new that the language hasn't caught up yet.
You don't launder your money by hiding who gave and received dollars. That's how you get the government all over you.
Rather, you anonmymize the bitcoins. Very simply... they buy bitcoins for dollars. You log everything in compliance with all their stupid laws.
Then you have everyone randomly swap bitcoins with each other so its impossible to know who got which ones.
Will the government still know you received some money? Sure. Good luck hiding that in any case. But this way at least they won't know where it came from or what you bought.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
And you don't even have modpoints? You brave soul.
Actually, I have 2 less mod points than I had before reading your comment
My ism, it's full of beliefs.
Once you have bitcoins, it's not hard to transfer them to another address. Who owns that address? Consider also coin tumblers and similar schemes. This is what laundering is about after all. Moving money around to disguise its provenance.
Still, who would use Bitcoin when you can just launder your money through a large bank who will only receive a slap on the wrist when caught?
Oh well, Slashdot was nice. I guess I'm going back to where I was in 1997. Reading zdnet and hanging out on various newsgroups.
1998 will be the year of Linux on the desktop!
Money laundering is not about hiding the fact that you have money - because you could just bury it in a chest somewhere, or in a case of Bitcoin receive it in a new adress - it's about providing a legitimate-looking origin for what you use. Coin tumblers don't help with that, they just make it harder to connect a particular transaction directly to another transaction.
Basically, when you buy a mansion, you can't do so with money from your cocaine sales, but must instead use money from your inexplicably succesful pet email webshop. Who buys all those pet emails, and where does their money come from? Beats you, you just get some Bitcoin and send an email to the address given. Surprised you too that it got so popular. Must be some weird hipster trend or something. Tacky, but perfectly legal. The money is yours fair and square, and so is the mansion.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
Barter system also dilutes govt hegemony.
Casteism